You've got to admire his inventiveness. In 2020, AMLO signed the USMCA (new North American trade agreement), which was also signed by the Americans and Canadians. In this agreement, there was a section on energy -- that AMLO made sure was included. Now, US and Canadian companies are suing the Mexican government and CFE for breach of contract under the USMCA agreement. AMLO's latest push is to announce that he is considering leaving the accord unless the Americans and Canadian walk away and allow him to do what he wants!
First, the one country that stands to lose the most is Mexico, the trade balance is not in Mexico's favour. As for services, Mexico is so far behind that there's little value there: Mexican Banking and insurance are decades behind what is available in America, and the latest catastrophe with the creation of trading markets only made the Mexican capital market is not even appealing to Mexican companies. Virtually all financial products purchased by Mexican companies are purchased in the US.
AMLO is almost certainly bluffing, it's a thing. He has no problems with expediency, the use of National Emergency law for the completion of the Maya Train section 5 is a case in point. He's created press events in cities across the country to announce projects. In one case, in particular, AMLO's team leased land (for 30 days) hired bulldozers and a crew of workers set up a tent and signposts and made a speech that CFE was going to build a power station on "this site". Within 48 hours everything was gone. That was in 2019...still the President got good press that day, and the journalists; never followed up. As one said, what's the point no one cares anymore
The Americans are certain that he is bluffing, but the question is, does this present an opportunity for America and Canada to revise the terms? I would suggest that this new AMLO stupidity is a wonderful opportunity for Biden and Trudeau to play international hardball against AMLO to extract concessions from Mexico that they could not get in 2019. Biden has everything to gain, he knows that the Mexicans are about to create a massive headache with regard to water rights between the southern states and Mexico. AMLO just presented Biden with the perfect opportunity, the question is will he take it?
Comments